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Archived Market Commentaries:
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Date:
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12-3-09
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Headline:
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Closing Grain Comments
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Comments:
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Final harvest weekend hours of the year will be posted on Friday.
Overnight gains were pared on this morning's trading re-open after the US dollar recovered & stocks & gold weakened from their 7:15 am trends. Exports were a key influence today. Sluggish corn & wheat weekly export sales contrasted with moderate weekly soybean & soy product sales & a huge weekly soybean shipments. The markets battled for the first couple hours this morning to see whether corn & wheat weakness would drag down beans or if bean strength would lift corn & wheat prices. By late in the noon hour, markets diverged as corn & wheat dropped to new intra-day lows & beans rallied to new session highs. March corn futures settled 5.75c lower, Jan beans gained 13c, & March CBOT wheat lost 4.5c on Thursday.
Weekly export sales were in the low to mid-range of trade analysts' expectations for the week ending Nov 26th, but weekly bean shipments were again torrid. Corn sales of 25.943 mb were within the trade's 15.7-35.4 mb range of expectation, but the total was far short of the pace needed to reach USDA export projections. With the marketing year now 1/4 completed, corn sales are 4.9% behind the average percentage-of-final sales pace since 1995. More importantly, sales trends have NOT been improving as the season progresses. Soybean sales slowed to 26.54 mb of old & .279 mb of new-crop last week--within the trade's 23.9-36.7 mb range of guesses--but shipments were again massive at 50.106 mb. China was again the dominant buyer (11.478 mb) & shipper (26.591 mb) of US beans. Sales of soymeal(114,000 mt vs 150,000-200,000 mt guessed) & soyoil (19,100 mt vs 10,000-40,000 mt expected) were modest. Year-to-date commitments of soybeans, soymeal & soyoil still remain far better then ever before for this stage of the marketing season. Wheat sales reached 14.352 mb last week--near feeble expectations that ranged 11.0-18.4 mb. With half the 2009-10 marketing season now passed, total wheat commitments are the worst in at least 30 years. Continuing recent dismal trends, only 1.117 mb of soft red winter wheat was sold last week. Although Japan (3.858 mb) & S Korea (.845 mb) bought US wheat last night, Egypt turned to Russia (6.613 mb) & Germany (2.204 mb) for wheat this morning. That's SRW wheat business we need. News that Canada increased its 2009 wheat crop estimate by 7.9% from Oct made wheat export prospects even more dreary.
Looking ahead to Friday, outside market action & fund activity probably holds the key to grain direction. A variety of asset markets faded to low-range closes this afternoon, suggesting there could be inter-related weakness tomorrow. Will the calendar date be a factor tomorrow? Corn, soybeans, soymeal, & soyoil all swooned to their market year lows & wheat set its fall low on Dec 5th last year. Some believe calendar dates such as that can mark an important turning point the following year as well--producing either a high or a low.
Wednesday's rain in the southern 1/3 of Illinois & much of the rest of the eastern Corn Belt, Delta & Southeast US shut down combines & stabilized basis this afternoon. Corn & wheat basis was steady & soybean basis firmed 2c today. Late Oct & early Nov basis levels proved extraordinarily strong as harvest was delayed. With harvest finally nearing completion, the late harvest push has combined with worries about quality to unseasonably drag basis lower.
Starting Monday, Dec 7th, Top Ag elevators will return to their winter schedule: Monday-Friday, 8:00 am-4:30 pm. Do you have non-GMO corn or soybeans or other specialty grain varieties that may be eligible for direct ship programs? Give Mike a call at the Okawville elevator at 243-5293 & let him know what varieties & quantities you have available. He'll keep you informed of what marketing programs develop.
"Closing Comments" are written by David Marshall, Toay Commodities Futures Group LLC, Nashville, IL. To learn more about his farm marketing advisory or commodity brokerage services, contact him at dmarshall@tcfg-llc.com or call (618) 327-4370 (voice/fax) or (618) 314-0918 (cell). This commentary is not intended for specific trading strategies. We strive to insure this information is reliable, but we cannot guarantee its accuracy or completeness. Commodity trading involves risks. You should fully understand those risks before trading.
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